One of the dumbest statements in modern times was Speaker of the House Nancy Pelosi’s declaration that “the best way to stimulate the economy” is through food stamps and unemployment insurance.
This economic mumbo jumbo defies basic common sense and helps explain why we still have more than 40 million Americans on food stamps — evidently, the more that get free food, the more prosperous we become. This is the crux of the continuing curse of Keynesian economics, which says that the more the government spends, the more the economy grows. A dollar of government spending leads to as much as two dollars of additional economic output, according to Professor Pelosi.
Hillary Clinton is apparently one of Mrs. Pelosi’s A students. The entire Clinton recovery agenda is to spend $1 trillion more on government public works programs, free day care and college education, and expanded entitlements. She would raise investment and personal income tax rates (paid by many small businesses) to finance all of this.
Hillary has been parading around a study by economist Mark Zandi of Moodys, which claims that this fairy dust will mean happy days are here again. He claims millions of new jobs and billions in added output. But Mr. Zandi has been one of the wrongest economists in America for the past decade. It was Mr. Zandi who claimed massive job gains and GDP growth from the Obama stimulus plan with food stamps and other giveaways.
Oops. Instead we got what The Wall Street Journal recently disparaged as “the weakest recovery since the 1940s” with stagnant wages.